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mgmt memo


Volume 2 Number 5                                                                                                         May 1983


Marketing Gets New Organizational Focus


Related Organization Announcements


Manufacturing And Related Organizational Changes


European Field Operations Establishes New Management


U.S. Area Field Service Aligns With Management Centers


New Focus For Low-End Manufacturing


Role Of The PDP-11 In The 1980s


Digital Moves To Fortune 100 List


Business Week Cover Story Presents A Tough Image Of Digital


Marketing Gets New Organizational Focus


"A major component of Digital's success int eh '80s is its ability to have a competent, highly visible, and strong marketing organization," said Ken Olsen, president, in a recent announcment about the Marketing function. "To achieve this, we have decidd to realign marketing into six market groups that will report directly to me.  These market groups will plan the companyh's business in our key markets.  To help with this process, I have asked Ed Kramer to be Corporate Vice President of Marketing, reporting to me," said Ken.


The six marketing group managers are:


Rose Ann Giordano will be in charge of a new group responsible for marketing large systems, which includes the Large Computer Group;


Bob Hughes remains in charge of the Business and Office Systems Group;


Bill Long, vice president, Technical Group, will be in charge of the Laboratory Products, Educational Systems and Medical Systems Groups;


Ward MacKenzie, vice president, OEM Group, continues in charge of the OEM, Chips and Boards Groups;


Joel Schwartz, vice president, will be in charge of marketing terminal and personal computers, and marketing computers through distributors and resellers such as Computerland. (This "resellers" market does not include Digital's Business Centers or DEC Dealers.)


Peter Smith will be in charge of the newly formed Computer Integrated Manufacturing (CIM) Group.


With the start of fiscal '84, the initial phase of our Professional and Rainbow Personal Computer Programs will be well established.  Andy Knowles, vice president, whose career at Digital has mainly focused on many successful start-up operations -- including the PDP=11 Program, the Components Group (the Timinals and LSI-11 Program) and the Small Systems Group (personal comptuers and terminals) -- will move to Hudson to again become involve din the development and marketing of Digital's next generation of technolgies.  He will be a member of the Product Strategy and Maring/Sales Strategy Committees.


Ed Kramer will take a leadership role with the six marketing group to ensure that each marketing group has a comprehensive, succinct, and timely message about Digital and its products and how the products meet customer needs. "They must work collaboratively to make certain the indi­vidual marketing groups have a process in place to clearly define the application and equipment needs of their customers,6 explained Ken. He noted that Ed and the six group managers must make certain the Marketing function has a well-coordinated, integrated strategic plan, and that stan­dards, roles, measurements and career paths are clearly defined and under­stood .


"I want to put fun and enthusiasm into marketing and collaborate with the group managers about ways to help the function improve in stature and professionalism," explained Ed.


"The new organization is simply a tool to help Digital achieve its goals of marketing excellence. We aren't just looking for a simple message. We are looking for a winning marketing strategy," said Ed. "We want to coordinate any strategies targeted at the same customers so that we can optimize our marketing efforts," he emphasized.


A couple of marketing groups have been realigned to help eliminate redundan­cies in target audiences and to make better use of the support staffs, which will now serve more than one market group. The Computer Integrated Manufac­turing (CIM) Group, for example, is a combination of the Engineering Systems Group and the Manufacturing, Distribution and Control Group. These groups were combined because their markets have become more closely aligned as automation and robotics have gained popularity.


Related Organization Announcements


Engineering responsibilities for the Engineering Systems (ESG) and the Manufacturing, Distribution and Control (MDC) and UNIX Engineering Groups will become part of a new group to be called Engineering for Computer Integrated Manufacturing. The group will be managed by Patrick Courtin, who will report to Jack Smith and Gordon Bell. Patrick will be a member of the Product Strategy Committee.


The marketing responsibilities for ESG and MDC will become part of the newly formed Computer Integrated Manufacturing market group, to be managed by Peter Smith.


Roger Cady, vice president, has taken a position doing consulting work on manufacturing and engineering projects. He will report to Jack Smith.


Two new marketing groups, Artificial Intelligence Marketing and Communica­tions Marketing, are being formed. They will report to Ed Kramer and be responsible for establishing Digital as a leading supplier of products for applications related to the two groups. Managers for the two groups will be named in the near future. The Communications Industry (Bell and non Bell) account-focused marketing efforts will continue as part of the field organi­zation .

Manufacturing And Related Organizational Changes


Paul Neuman, manager of Europe's Manufacturing operation for the last four years and with Digital for 15 years, will return to the States this summer to become manager of the Traditional Product Line. He will report to John Alexanderson.


Henry Crouse, vice president, who has been External Resources manager since 1975 and with the company since 1959, will become manager of Europe's Manufacturing operation. He will begin his new assignment this summer, reporting to Bill Hanson and Jean-Claude Peterschmidtt.


Abbott Weiss will become Manufacturing Business manager for the Mid-Atlantic and Southern Area Management Center, Abbott, who was the Corporate Materi­als manager for the last 2-1/2 years and with Digital for almost ten years, begins his new assignment immediately. He will report to Harvey Weiss.


Bill Thompson, vice president, who has been Corporate Controller for the last five years and with Digital for 12 years, will take responsibility for both the External Resources and Corporate Materials operations. He will begin to make the transition into his new job immediately, but will make the final job switch after year-end results have been reported and his successor is in place. He will report to Jack Smith.


European Field Operations Establishes New Management


"European Field Operations has reorganized to develop the most dynamic, qualified and responsive Sales and Service Operation in the European com­puter industry," says Pier-Carlo Falotti, vice president.


The new European Field Operations is as follows:


Marketing, managed by Michel Ferreboeuf, will ensure Europe has a coordinat­ed and coherent set of products, applications, sales and marketing strat­egies. International Sales Office, managed by Bobby Choonavala, will promote a professional company image and expand business in large accounts and in existing and new industry sectors. Small Systems Operation & Pro­ductivity Office, managed by Al Peters, will develop new ways to sell Small Systems products cost-effectively, and a new sales operation application portfolio for the future. Personal Computer Office at Corporate, managed by Eli Lipcon, will continue to report to Pier-Carlo and Joel Schwartz and cover all European needs in Small Systems.


Support Services, managed by Sergio Giacoletto, will now support the Sales Operation, as well as manage the Support Operations of Field Service and Software Services. Software Services, managed by David Stone, will continue to focus on strategic, marketing and operational issues. Field Service and Installed Base Group, managed by Don Zereski, will assist in expanding business volume and improving customer satisfaction. Educational Services, temporarily managed by Pier-Carlo, will play a more important role in sales and marketing strategies and the internal delivery of professional and quality training. Jamie Muir has been appointed to manage the sales train­ing and personnel development effort.


Field Operation Finance, managed by Werner Oppliger, will manage the Hard­ware Services, Field Service, Software Services and Educational Services Finance groups and support the team in achieving its financial and opera­tional goals. Finance and Administration, is managed by Bill Helm. (This summer Bill will return to Corporate F&A and Marty Ford will move from the States to manage the European F&A operation.) Personnel, managed by Shel Davis, vice president, will focus on employee relation programs to ensure the continuation of a positive work environment.


UK, Ireland, and the Middle East will continue to be managed by Darryl Barbe; France by Claude Sournac; Italy by Bruno D'Avanzo; and Germany by Willi Kister. As European Country group manager, Geoff Shingles, vice president, will manage all country operations except for those mentioned above. He will share European Field Operations resources in support of his operation.


U.S. Area Field Service Aligns With Management Centers


In parallel to the newly announced Area Management Centers which have divided the seven U.S. regions into three areas, U.S. Area Field Service has appointed three managers to develop and execute revenue and service-delivery plans for their respective geographic areas. In addition, they will repres­ent their areas on the Field Service Management Committee.


Bob Brooks is Field Service manager of the Western/Central U.S. Area, consisting of Western, Southwestern and Central Regions. Don Leighton is Field Service manager of the Northeast U.S. Area, consisting of the New York/New Jersey and Northeast Regions. Rich Nortz is Field Service manager of the Mid-Atlantic/Southern U.S. Area, consisting of the Mid-Atlantic and Southern Regions.


Bob Lux and Don Zereski will continue in their Field Service management positions in GIA and Europe, respectively.

New Focus For Low-End Manufacturing


To establish clearer linkages with Low-End Engineering, the Far East and Europe, Terminals Manufacturing has reorganized as Low-End Manufacturing with three Product groups—Videos, Printers and Small Systems. Dick Esten will manage the group which will also include a Low-End Business Center. Transition into the new organization will be completed by the end of Q-l of FY !84.


"Management of the Video, Printer and Small Systems businesses will develop and implement worldwide manufacturing strategies which deliver competitive products to our major international markets. Clustering our products into three groups should help us make decisions that reflect the uniqueness of various markets. This includes determining the manufacturing capacity needed in different parts of the world. U.S. manufacturing plants in each of these Product groups will focus on meeting U.S. customer needs. Depen­ding on market needs, their charters will vary and might, on occassion, include taking on non manufacturing work," explained Dick.


Managers of the Video, Printer and Small Systems groups will be responsible for developing Manufacturing business strategies and interfacing with Engineering, Marketing, the Field and other Manufacturing organizations.


Group functional management will no longer exist since their work will be done by the product group staffs. Instead, similar work that requires a critical mass will be performed in one Product group for the others on a shared basis.


"I believe that this new structure will capture some of the entrepreneurial excitement of the past while contributing to changes required for success in a dynamic, competitive and diverse market," explained Dick.


Effective July 1, Bob Hopley will be the Printer Group product manager with line responsibility for Phoenix. Bruce Anderson will be the Videos Group Product manager with responsibility for Albuquerque. Fred Forsyth will head the Small Systems Product Group with line responsibility for Boston and Westfield. Dawn Greeley will be the Low End Business Center manager con­cerned with products from all three groups. Dave Spratt will continue as Controller of the group.


To assure a smooth transition into the new organization, Mark Abbett will head a team responsible for communications, planning and implementation.


Role Of The PDP-11 In The 1980s


The PDP-11 family of computers, responsible for Digital's enormous growth in the early and mid 1970s, still accounts for a large part of the company's business. In a recent interview, Mike Gutman, manager, PDP-11 Systems Development, talked about the continuing importance of these products.


"The PDP-11 family of computers plays two major roles in the corporation. At the lower end of the price/performance spectrum, they are our most cost effective multi-user computer systems. They also provide excellent real­time performance. We expect that small PDP-lls, such as the MICRO/PDP-11, will be the mainstay of the company in this cost-sensitive multi-user area.


"At the high end, both existing products and products in development are attuned to the needs of our present customers, who have made large invest­ments in products and applications based on PDP-11 systems. These customers want to continue to capitalize on their investments around PDP-lls. This upper end includes the Jll chip set and new products that will be built around it.


"About 300,000 PDP-lls are installed today. There's tremendous inertia and opportunity in an installed base of that size. Today these customers use both PDP-11 and VAX systems, and they'll add more of each as their partic­ular applications require. When we introduce new products into what is now the PDP-11 space, they will begin to migrate to those new products. We'll provide customers with the tools and the capabilities to make a smooth transition, but the change will probably be slow, with demand for PDP-lls continuing for the rest of the decade.


"Meanwhile, we're making our PDP-11 products as cost-effective as possible. In our new low-end computers, we've used subsets of operating systems that were developed for larger systems (for instance, MICRO/RSTS). The software requirements permit us to use small inexpensive disks. And whenever pos­sible, we use the same components as our personal computers to get savings from high volume manufacturing."


Digital Moves To Fortune 100 List


Digital moved from the 137th to the 95th largest U.S. industrial corporation in sales revenue in the Fortune 500 listing for 1982. Digital ranked 69th in assets and 32nd in net income according to the May 2, 1983 issue of Fortune.

Business Week Cover Story Presents A Tough Image Of Digital


The May 2, 1983, Business Week cover story was entitled, "A New Strategy for the No. 2 In Computers; Will DEC'S Massive Overhaul Pay Off?". The article presented some of Digital's strengths and weaknesses as perceived by the author. It focused on market and organizational changes which have been taking place over the last several quarters and why these are important.


It noted that Ken Olsen's goal is: "a radical transformation of his engi­neering-oriented company into a tough, market-driven competitor."


The article credited Digital's management for beginning to institute manage­ment changes before financial results portended problems. It quotes Jack Shields as saying, "we knew we had to cut costs, simplify, streamline, delegate, and establish short communication lines inside and outside to be competitive."


Digital's strategy is described as making the "current minicomputer products work together with its new desk-top computers and office automation gear."  In the article, Ken Olsen explains that business people buying personal computers are soon going to discover that they need to share files and want more than one user on the system. "Under these circumstances, the minicomputer becomes more important than ever.  Our strategy emphasizes the mini," says Ken.


Many topics were covered in the article, including customer relations, the personal computer and office automation markets, leadership and the internal organization of the company, and Digital's marketing structure.  privacy statement